Something really surprising just happened in the housing market

A
sign near a cluster of vacant homes in Isleton,
California.REUTERS/Robert
Galbraith

Something really surprising just happened in the housing market.

Existing home sales unexpectedly rose 1.1%, to a seasonally
adjusted annual rate of 5.57 million, in June, according to the
National Association of Realtors.

Economists had been anticipating sales to fall 0.9%, to
a seasonally adjusted annual rate of 5.53 million, according to
the Bloomberg consensus.

"Sales of existing homes were unexpectedly strong in June, edging
up for the fourth consecutive month to a nine-year high and
defying expectations for a modest monthly decline," Zillow chief
economist Svenja Gudell wrote after the data crossed. "The gain
is even more surprising given a continued shortage of homes
available for sale, with inventory down almost 6% compared to the
same time a year ago."

"Still, limited inventory and high prices will continue to hamper
a full return to a 'normal' market, especially given how good
affordability is overall. This one-two punch of few homes for
sale and rapidly rising prices is especially likely to impact
markets in the west going forward," she added.

Sales are now up 3.0% from June 2015 (5.41 million), and remain
at their highest annual pace since February 2007 (5.79 million),
according to the National Association of Realtors.

"Looking ahead, it's unclear if this current sales pace can
further accelerate as record high stock prices, near-record low
mortgage rates and solid job gains face off against a dearth of
homes available for sale and lofty home prices that keep
advancing," Lawrence Yun, NAR chief economist, wrote in the
report.

Notably, Trulia chief economist Ralph B. McLaughlin pointed out
that although the overall sales volume is now nearing the
prerecession average, there are more households in the US now
than there were in the early 2000s. "As such, a lack of supply
continues to hold back home buyers," he said in an email after
the data crossed.

Moreover, he added that this month's supply of existing homes was
the lowest since June 2005.

But "a silver lining from tight inventory is that homes are
selling faster, which benefits agents and sellers. Existing home
sales per agent ticked up to the highest level since June 2015,"
he added.